Aryzta takes a €500m hit on bakery business
A US bakery business bought by Irish-Swiss food group Aryzta less than four years ago for around €530m was sold last week for a knockdown price of only €20m.
The low price for Cloverhill, which has operations in Chicago, follows an immigration crackdown on the business last year which forced out 800 staff, the equivalent of a third of its workforce.
The price tag was revealed in US regulatory filings seen by the Sunday Independent.
The deal by Aryzta to buy Cloverhill was part of a $1bn purchase of two North American assets in 2014. At the time, it was estimated that Cloverhill accounted for $660m (€530m) of that purchase price.
Last year's raids resulted in the departure of skilled bakery staff from Cloverhill and Aryzta struggled to replace them.
The staff that left the facility had been supplied by a third-party agency. The US business became loss-making and last month the group signalled it was preparing to sell the company.
Cloverhill was bought by a company called Hostess Brands and although a price was not revealed in an announcement last week, a filing with the US Securities Exchange Commission said it has been sold for $25m (€20m).
"The transaction is an asset purchase for approximately $25m utilising cash on hand. The assets acquired include approximately $10m of inventory and the property, plant, equipment and customer relationships serviced by the Chicago Cloverhill bakery facility," said the filing.
The new owner expects the business to lose $15m to $20m in the second half of 2018 but to deliver underlying profit of $20m to $25m by 2020.